2018Da225289 Confirmation of the status of the executive partner and representative member

Plaintiff

Law Firm Don Law Firm, Attorneys Kim Don-soo

Attorney Kim Sung-sung

Gwangju Commerce Limited Partnership

Intervenor joining the Defendant

Gwangju High Court Decision 2017Na12034 Decided January 30, 2018

July 8, 2021

The judgment below is reversed, and the case is remanded to the Gwangju High Court.

The grounds of appeal are examined.

1. A. A. The purpose of Article 269 and Article 205 of the Commercial Act (Article 269 and Article 205 of the Commercial Act) is to remove the grounds for interference with the operation of the company by clearly depriving the managing partner of his/her authority who has committed an act of violating his/her duties and is to perform his/her duties in a limited partnership company. The judgment declaring the forfeiture of authority by the managing partner is a formation judgment and where the managing partner loses his/her authority due to the final and conclusive judgment (see, e.g., Supreme Court Decision 75Da1341, Apr. 26, 197). If a managing partner loses his/her right of representation and power of representation due to a judgment declaring the forfeiture of authority by a limited partnership company, the mere fact that the managing partner became the sole general partner of the limited partnership company due to any reason thereafter becomes null and void as a matter of course, and the relevant managing partner’s and power of representation cannot be deemed reinstated.

B. In order for a general partner who has been sentenced to the forfeiture of executive authority in a limited partnership company to have another managing partner or representative authority, such authority shall be newly granted with the consent of the articles of incorporation or all the members (Articles 273, 269, 201(1), and 207 of the Commercial Act). The provisions of the articles of incorporation stipulating that a managing partner or representative partner shall be appointed from a limited partnership company is valid, and where a managing partner or representative partner is appointed from a limited partnership due to the subsequent reasons, the provisions still remain valid unless there are special circumstances. Provided, That where another general partner becomes the sole general partner due to the forfeiture of executive authority and the forfeiture of executive authority due to the death of another general partner after having been sentenced to the forfeiture of executive authority and the forfeiture of representative authority, it is reasonable to deem that the unlimited general partner who has lost executive authority cannot independently exercise voting rights based on the above articles of incorporation. This interpretation accords with the purpose of the adjudication system declaring the forfeiture of executive authority by judgment and the guarantee of the managing member’s right to monitor and good faith principle. In such case, only the consent of all the general partners including limited partners can be appointed.

2. Review of the reasoning of the lower judgment and the record reveals the following facts.

A. The Defendant was a limited partnership company established on June 28, 1979 for the purpose of the taxi passenger transportation business, etc., and the Defendant’s unlimited liability partner as of May 29, 2009 was the Plaintiff and Nonparty 1.

B. At the time of June 10, 2009, Nonparty 2 and Nonparty 3, a partner with limited liability of the Defendant, claimed against the Defendant’s managing partner and the Plaintiff who was a representative member, for the adjudication of forfeiture of the right to conduct business, and on December 13, 2012, the judgment of the court that sentenced the Plaintiff to the forfeiture of the right to conduct business became final and conclusive (hereinafter “the judgment of this case”).

C. Nonparty 1 died on May 12, 2014, and thereby became the only general partner of the Defendant.

D. Article 18 of the Defendant’s articles of incorporation provides, “The Plaintiff, the sole general partner of which, on June 10, 2015, has opened a general partner meeting independently on the ground of the provisions of the above articles of incorporation and resolved to appoint himself as the Defendant’s managing partner and representative member (hereinafter “instant resolution”).

3. Examining the above facts in light of the legal principles as seen earlier, in the event that the Plaintiff, who was a general partner, was sentenced to the forfeiture of its executive authority by the judgment of this case, the judgment of this case becomes null and void solely on the ground that Nonparty 1, who was another general partner, was the Plaintiff’s sole general partner due to the death and retirement of Nonparty 1, who became the Defendant, and cannot be deemed to have restored the Plaintiff’s executive right and representative authority. In addition, the resolution of this case made solely by the Plaintiff based on Article 18 of the Defendant’s Articles of incorporation does not take effect unless the Plaintiff consented by all the members, including limited partners. Ultimately, solely on the ground that

Nevertheless, the lower court determined that the Plaintiff was in the position of the Defendant’s managing partner and the representative member. In so doing, the lower court erred by misapprehending the legal doctrine on the validity of the instant judgment that rendered a forfeiture of executive authority, thereby adversely affecting the conclusion of the judgment. The allegation contained in the grounds of appeal on

4. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Noh Tae-tae

Justices Lee Ki-taik

Justices Park Jung-hwa

Justices Kim Jong-soo